forex currency

Advantages of Forex technical analysis

According to trading experience of many traders, technical analysis is the most popular among other types of analysis. Let’s find out why?

The main advantages of technical analysis:

  1. Technical analysis is easier to use than fundamental analysis in forex. With fundamental analysis of the financial markets, it is important to determine the current state of the economy of the country concerned, but also important to the relationship between the development of economy interdependent with her country. That is necessary to analyze not only the economic situation of individual countries, but also to calculate their mutual influence, and the task force for only skilled analysts. With technical analysis considers only the schedule of changes in price and volume, so learn to use it in perfection may even those who are not aware of the political developments and are not familiar with the economy of a country.
  2. Technical analysis is based on a detailed examination of price and volume charts. The basis of technical analysis are 3 main postulates: 1. The dynamics of the price chart takes into account all the factors. 2. Prices are always moving direction (trend). 3. History repeats itself constantly (especially for the forex currency pair euro dollar).
  3. Indicators of technical analysis is the main assistants of a trader. On the basis of the above postulates have been developed technical analysis indicators, which are then implemented in software in the trading terminal. For the construction of the indicators used methods of mathematical statistics and probability theory. Their use in technical analysis is very simple. The indicator is superimposed on the price chart, and their crossing in either direction is determined by the current trend.

The most impressive advantage of technical analysis is the ability to set stop orders. This is a very serious advantage. Such as it may seem, an elementary factor has incredible value for profitable trading.

These advantages of technical analysis can analyze the situation on the market in the current time period, so it is possible to find the most favorable terms for the purchase or sale of foreign currency. In this regard, technical analysis has become a versatile tool that can be readily applied to trade in any financial market.